According to new data from the Miami Association of Realtors, Broward County Florida broke its record for the most annual home sales in only 10 months as October 2021 sales totals pushed the market over the old standard.
Broward County total home sales decreased 8.5% year-over-year in October 2021, from 3,241 sales to 2,967, because of lack of inventory and Covid19 comps (stats are in comparison to major rebound demand last year). Broward single-family home transactions decreased 16.3%, from 1,656 to 1,386. Broward existing condo sales decreased a negligible 0.3%, from 1,585 to 1,581.
Year-to-date, Broward has registered 34,167 existing total homes sales in 10 months, which surpasses the previous annual record of 33,891 transactions in the entire year of 2016.
"A historic home sales year for Broward County real estate and the total would be even higher if there was more inventory," Broward-MIAMI President Patrick Simm said. "Broward and Fort Lauderdale real estate offers a low-tax, pro-government market with increased access to water, beaches, an incredible downtown, shopping and more."
Broward Luxury Sales Jump as Northeast and West Coast Buyers Move to Mega Region
Broward single-family luxury ($1-million-and-up) transactions rose 20.3% year-over-year to 142 sales in October 2021. Broward existing condo luxury ($1-million-and-up) sales surged 65.4% year-over-year to 43 transactions.
There are 3.6 months of supply in luxury single-family homes; 5.8 months of supply in luxury condos. Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are coming here for the vaccine and purchasing property.
Vaccinated foreigners were allowed to resume travel to the U.S. starting on Nov. 8 and that will lead to more international investment in South Florida - the No. 1 destination for foreign buyers. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures.
Broward single-family homes priced between $400K to $600K decreased 6.2% year-over-year to 497 transactions in October 2021. Broward existing condo sales priced between $400K to $600K increased 90.7% to 143 transactions.
Low-Supply/High-Demand Market for Broward Real Estate
There is always a seasonal fade in inventory in the fall and winter. More inventory is expected to come to the market in 2022 as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
New listings of Broward single-family homes decreased 18.5% to 1,619 from 1,986. New listings of condominiums decreased 9.2%, from 2,207 to 2,003.
Inventory of single-family homes decreased 32.9% year-over-year in October 2021 from 3,278 active listings last year to 2,198 last month. Condominium inventory decreased 54.6% year-over-year to 3,503 from 7,720 listings during the same period in 2020.
Months' supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months' supply of inventory for single-family homes decreased 44% to 1.4 months, which indicates a seller's market. Inventory for existing condominiums decreased 69.8% to 1.9 months, which indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of October 2021 decreased 48.2% year-over-year, from 10,998 to 5,701.
Nationally, total housing inventory at the end of October amounted to 1.25 million units, down 0.8% from September and down 12.0% from one year ago (1.42 million). Unsold inventory sits at a 2.4-month supply at the current sales pace, equal to September's supply, and down from 2.5 months in October 2020.
Broward Homeowners' Home Equity Continues Surging as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Broward County single-family median prices increased 17.8% year-over-year in October 2021, increasing from $415,000 to $489,000. Existing condo median prices increased 20.6% year-over-year, from $189,000 to $227,950.
The greater share of Broward luxury sales in 2021 compared to a year ago is part of the reason for the large year-over-year increase in median prices.
Rising median prices is a trend nationwide as record-low mortgages rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 3.07 in October, up from 2.90% in September. The average commitment rate across all of 2020 was 3.11%.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. As more sellers list properties in 2021 and 2022, the increased inventory should ease the growth of median prices.
Miami remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 85 square meters of prime property, according to Knight Frank's 2021 The Wealth Report. Monaco (15 square meters), Hong Kong (23), London (31), New York (34) and Geneva (35) and others offer significantly less prime land for $1 million.
Broward Dollar Volume Totals $1.4 Billion, Showcasing Impact Housing Plays in Local Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Broward dollar volume showcases the impact housing plays in the local economy.
Broward total dollar volume totaled $1.4 billion in October 2021. Single-family home dollar volume decreased a negligible 0.1% year-over-year, from $913.4 million to $912.4 million. Condo dollar volume increased 21.7% year-over-year, from $385.3 million to $468.9 million.
Broward Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.9% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, compared to 1.9% in October 2020.
Total Broward distressed sales decreased 55.7% year-over-year in October 2021, from 61 to 27. Short sales and REOs accounted for 0.4% and 0.5% year-over-year, respectively, of total Broward sales in October 2021. Short sale transactions decreased 47.8% year-over-year while REOs decreased 60.5%.
Nationally, distressed sales represented less than 1% of sales in October, equal to the percentage seen a month prior and equal to October 2020.
Broward Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 99.2% in October 2021, up 1.6% from 97.6% last year. The median percent of original list price received for existing condominiums was 97.5%, up 2.3% from 95.3% last year.
The median number of days between listing and contract dates for Broward single-family home sales was 17 days, a 22.7% decrease from 22 days last year. The median time to sale for single-family homes was 59 days, a 13.2% decrease from 68 days last year.
The median number of days between the listing date and contract date for condos was 21 days, down 43.2% from 37 days. The median number of days to sale for condos was 63 days, a 19.2% decrease from 78 days.
Broward Cash Sales 62.9% More than National Figure in October 2021
Cash sales represented 39.1% of Broward closed sales in October 2021, compared to 30.4% in October 2020. About 24% of U.S. home sales are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects South Florida's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 52.9% of all Broward existing condo sales and 23.3% of single-family transactions.